Electricity Markets

ERCOT predicts record-breaking peak power demand this summer

The Electric Reliability Council of Texas on March 1 said that it is predicting record-breaking peak power usage this summer, which it said will be driven by the state’s strong economy.

ERCOT, the grid operator for most of Texas, also expects the recent retirement of older generating units to result in tight operating reserves.

ERCOT released its final Seasonal Assessment of Resource Adequacy report for the upcoming spring season (March – May) and its preliminary assessment for the summer season (June – September).

"The ERCOT market has experienced a series of new peak demand records over the last few years as Texas’ economy continues to grow at record pace," Bill Magness, ERCOT President and CEO said. "We expect high peak demand will continue this summer."

The ERCOT wholesale market provides strong financial incentives for generators to be available when demand rises, and for retail electric providers to prepare for price fluctuations, the grid operator said in a news release.

ERCOT also anticipates voluntary load reductions and an increase in power sold in the market by industrial facilities in response to higher power prices during peak demand.

Total resource capacity for the upcoming summer is expected to be 77,658 MW. The preliminary summer Seasonal Assessment of Resource Adequacy report includes a 72,974 MW summer peak load forecast based on normal weather conditions for 2002-2016. This forecast is higher than the all-time summer peak demand record of 71,110 MW set on Aug. 11, 2016.

Almost 3,800 MW in new generation resources began operating in 2017, and more than 14,000 MW of resources are planned to be in service by 2020.

The final summer Seasonal Assessment of Resource Adequacy report will be released in May and will reflect the expected summer weather conditions.

ERCOT on March 1 also released the final SARA report for spring. At this time, ERCOT anticipates there will be sufficient generation to meet system-wide demand under a range of extreme system conditions. The adjusted spring peak load forecast is expected 59,477 MW.